During auditory paired-stimulus paradigms, schizophrenia subjects have smaller differences between S1 and S2 amplitudes than normal. A series of reports indicate this effect results from smaller S1 amplitudes, not larger S2 amplitudes, among patients. These findings are consistent with reports from other studies of auditory information processing in schizophrenia, perhaps revealing a pattern that contains important clues about the neuropathological correlates of this illness. The proposed research will evaluate this possibility by studying the cognitive and sensory correlates of auditory evoked responses (AERs) using 143-channel MEG and dense array EEG. We will use steady-state stimulation and auditory oddball and paradigms to help clarify (1) The limits on cortical neuronal response rates and the associated ability to integrate information over time during auditory processing in schizophrenia, (2) whether group processing of simple auditory stimuli can be normalized among schizophrenia patients by entrainment of neuronal activity at a 'manageable' rate (which will have implications for understanding the relationship between background brain states and auditory processing in schizophrenia), and (3) whether auditory processing abnormalities in schizophrenia is primarily associated with left hemisphere dysfunction and is a predictor of presence of auditory hallucinations, and (4) whether interhemispheric communication secondary to dysfunction of left auditory cortex is a cause of auditory recognition abnormalities among schizophrenia patients. Analyses will rely on current distributed source reconstructions, measures of spectral coherence in source and sensor space, measures of spectral power, and dipole modeling using realistic head models. It is hypothesized that schizophrenia patients have a limited ability to integrate information over time secondary to a low ceiling on neuronal response rates and that this effect is primarily due to left auditory cortex dysfunction. Indeed, right auditory cortex will be found to function normally among schizophrenia patients. Because of a low sampling rate on schizophrenia patients' auditory information processing systems, they have difficulty recovering the initial stimulus information, an abnormality that could facilitate the development of hallucinatory phenomena. In addition, dysfunction of left auditory cortex impedes proper inter-hemispheric communication, which interferes with the ability to generate normal recognition-type responses measured during oddball-type paradigms.